Employees Stay Put as Economic Uncertainty Persists

Concerns about the fiscal cliff, modest job growth, and mixed corporate earnings reports continue to fuel employees’ uncertainty about the global economy. Shifting economic signals may explain why an overwhelming majority (80 percent) of global employees surveyed say they have no intention of looking for a new job over the next 12 months, according to Deloitte’s September Talent 2020 report.

Employees’ plans to ride out the recovery with their current companies may cause employers that have been nervous about losing critical workers to breathe a sigh of relief. But it shouldn’t lead them to complacency, says Bill Pelster, principal and leader of Deloitte Consulting’s Talent Services practice.

“Companies would be mistaken to neglect their talent and retention strategies based on data that suggests they may not need to worry about turnover,” says Pelster. “Employers still face many challenges filling technical and skilled jobs, and they should be diligent in their efforts to retain employees with critical skills who are at high risk of leaving. That includes understanding why employees may be satisfied or unsatisfied in their jobs.”

Deloitte’s Talent 2020 online survey of 560 employees across many major industries and geographies uncovered several factors that contribute to employee satisfaction and lead them to stay in their jobs. These factors include work that uses their skills effectively, opportunities for advancement, and trust in corporate leadership.

Robin Erickson, Ph.D., a specialist leader in Deloitte Consulting’s Human Capital practice, says that although the survey findings are not specific to IT professionals, they’re still useful to CIOs.

“The data reveals the organizational factors that influence employees’ plans to look for a new job, the segments of CIOs’ workforces at high risk for turnover, and steps they can take to retain valuable personnel,” she says.

Employees Want Employers to Tap their Potential

Surveyed employees want to exercise their talents to the fullest extent possible. They’re most satisfied with and committed to jobs when they believe their employers make use of their capabilities. Case in point: Of the 80 percent of survey respondents who plan to stay with their current employer, 72 percent feel their skills and abilities are being used effectively.

Meanwhile, one of the leading reasons 20 percent of respondents say they’re looking for a new job is because their existing job doesn’t challenge them. Just over four in 10 respondents (42 percent) who have been seeking new employment believe their job does not make good use of their skills. (See Figure 1.)

Figure 1: What would encourage you to look for new employment?

Source: Deloitte Consulting LLP

Career Progress

Not surprisingly, lack of advancement opportunities is another reason surveyed employees hope to switch companies in the next year.

What’s more interesting about advancement opportunities is that they may have contributed to the large percentage of surveyed employees who don’t plan to leave their employers. Data from this survey and a similar study published in January 2012 suggests that the retention measures some companies took in 2011 may have helped curb employee turnover. Nearly half (46 percent) of employees who say they’re not looking for a new job received a promotion (22 percent), changed roles (15 percent), or took a new job with a new employer (nine percent) in the 12 months prior to the survey.

Leaders Matter

Trust in leadership emerged throughout the study as an important retention factor and a critical component of job satisfaction. Strong leadership can make the difference between an employee who is committed to her current job and one who is constantly searching for a new one.

Indeed, nearly two-thirds (62 percent) of surveyed employees who plan to stay in their jobs trust their corporate leaders and say their employers communicate effectively to build trust. They also report their confidence in their companies’ ability to execute strategy.

Of respondents who want to switch jobs, only 27 percent trust their leaders, two-thirds say their employers don’t communicate effectively, and one-third don’t think their companies can execute their strategy.

“The data implies that a workforce is far more engaged and committed when it trusts its leaders, receives clear communications about corporate strategy, and believes its leaders can act on that strategy,” says Pelster.

High-Risk Segments

Turnover intentions appear to be concentrated among specific groups of employees at certain points in their careers. Surveyed employees who’ve been with their organizations for less than two years expressed the strongest intentions to change jobs. One-third indicated they expect to have a new job within a year.

Members of the millennial generation (those age 31 and younger) appear most likely to test the job market. Twenty-five percent of those surveyed say they plan to leave their employers over the next year, compared with 21 percent of Generation X employees and 17 percent of Baby Boomers.

“Effective retention strategies should be aligned with the needs and desires of critical talent, especially when they belong to groups at high risk for turnover,” says Erickson.

If companies can keep employees for more than two years, survey data indicates that retention may get easier. The longer employees stay with a company, the less likely they are to look for a new job. A full 85 percent of employees surveyed who have been with their current employers for five years or more plan to stay with their organization for the next 12 months.

“With ongoing economic uncertainty, more employees see developing their skills with their current employer as their best career option,” says Pelster. “The companies that tailor their retention practices and offer employees both learning and leadership development opportunities can reap the benefits of increased employee productivity and engagement.”

About Deloitte Insights

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